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Commercial Property Financing Options

Ground-Up & Rehab Construction Loans

NC helps borrowers explore construction financing solutions through lending relationships for ground-up development and major rehabilitation projects.

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Construction Financing Overview

Construction Financing for New Builds and Property Improvements

Construction Loans are short-term interim financing solutions designed for new construction and major rehabilitation projects before securing long-term financing or completing a planned disposition.

Loan structures may include fixed or variable rates with interest-only payments during the construction period. Terms are generally structured from 1 to 3 years, with the loan due at the end of the term. Prepayment penalties are not required in most cases.

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Ground-Up Construction Loans

Financing for New Construction & Development

Ground-Up Construction Loans provide financing solutions for new construction and development projects.

Ground-Up Construction Loan Details

Ground-Up Construction Loan Parameters

Maximum ARV

65%

Maximum LTC

80% to 85%

Build Cost

Up to 100%

Minimum Credit Score

650

Building under renovation wrapped in protective material with visible scaffolding

Rehab Loans — 1 to 3-Year Terms

Rehab Construction Capital

Rehab Construction Loans are short-term financing solutions designed for minor to major rehabilitation projects before securing long-term financing or completing a property disposition.

Programs are available with fixed or variable interest rates. Private lending programs generally provide terms up to 2 years, while bank programs may offer terms up to 3 years.

Loans are structured with interest-only payments, with the remaining balance due at the end of the loan term. In most cases, there is no prepayment penalty.

Eligible Property Types

Properties Eligible for Construction & Rehab Financing

Eligible properties may include:

Multifamily properties with 5+ units
1–4 unit residential properties
Condominiums
Office
Retail
Industrial
Manufactured housing
Self-storage
Hotels
Healthcare properties

Most property types may be considered, including:

Multifamily
Office
Retail
Industrial
Mixed-use
Specialty-use properties
1–4 unit residential

Understanding Loan-to-Cost (LTC)

How Loan-to-Cost Is Measured

Loan-to-Cost (LTC) measures the loan amount compared to the total project cost.

Total project cost includes the property cost along with all completed and planned hard and soft costs related to the project.

Construction & Rehab Loan Details

Ground-Up Construction & Rehab Loan Comparison

Ground-Up Construction Loans

  • Maximum ARV: 65%
  • Maximum LTC: 80% to 85%
  • Build Cost: Up to 100%
  • Minimum Credit Score: 650

Rehab Loans

  • Maximum ARV: 75%
  • Maximum LTC: 90%
  • Build Cost: Up to 100%
  • Minimum Credit Score: 650

SBA loans may have a maximum LTC of 90%.

Loan Amounts

Construction & Rehab Financing Amounts

Ground-Up Construction

$300K to $100MM+

Rehab Loans

$300K+

Borrower Experience & Occupancy

Experience Requirements & Eligible Occupancy

Borrower Experience

Prior construction or rehabilitation experience is highly preferred.

Occupancy

Financing may be considered for:

  • Owner-occupied residential developments
  • Investment properties
  • Commercial owner-user properties

Rates

Construction Loan Rate Structure

Starting rates may be based on Prime + 2%.

Final pricing is project-specific and heavily influenced by sponsor experience and transaction details.

Liquidity, Amortization & Reserve Account

Financial Requirements & Payment Structure

Liquidity Requirements

Minimum liquidity requirements generally include:

  • 10% of the project budget
  • Minimum 6 months of interest reserves

Amortization

Interest-only payments during the construction period.

Reserve Account

A reserve account may be used to make monthly payments on behalf of the borrower until the construction phase is complete and the property is ready for take-out financing.

Builder Requirements

Builder Approval Process

The builder must be approved by the applicable lender.

Two workers examining blueprints inside a building under construction

Required Documents for Loan Review

Documentation for Construction & Rehab Loan Review

Borrowers may be required to provide:

  • Sponsor resume and construction/rehab track record
  • Sponsor personal financial statement
  • Project scope of work and budget
  • Schedule of Real Estate Owned (REO)

All financing is subject to approval, underwriting requirements, and applicable lending partner guidelines.

Explore Construction Financing

Whether you are planning ground-up development or a major rehabilitation project, NC can help you explore construction financing solutions through a network of institutional and private lending partners.

Contact NC to discuss your project and learn more about potential construction and rehab financing options.

Request a Financing Consultation Today

Tell us about your construction or rehabilitation project and explore available financing solutions for your development goals.

Contact NC today to discuss your construction financing needs.

Contact NC Today